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Lack of Proper Controls from FSA Caused Problems with Energy Program

Former House Ag Chair takes partial blame for BCAP 'fiasco'.

Jun 07, 2011

USDA Inspector General Phyllis Fong told a House Ag Subcommittee last week that her office found wide-ranging problems with the initial administration of the Biomass Crop Assistance program, which makes payments to producers of energy-dedicated, nonfood crops. Fong traced the problems to hasty implementation of the program by the Farm Service Agency.

"The agency was very concerned with getting the money out," Fong said. "And did not take the time in our opinion to include management controls adequate to prevent erroneous or potentially improper payments."

Specifically, the OIG faulted FSA for expending nearly $250 million to implement the handling aspects of BCAP, such as collecting and transporting biomass, prior to issuing rules for the program.

House Agriculture Committee Ranking Member Collin Peterson, D-Minn., said he is to a certain extent responsible for this. He chaired the committee when BCAP was authorized in the 2008 Farm Bill.

"The timber industry saw an opportunity here, they were in trouble needing to make money, and saw an opportunity to supplement their income," Peterson said. "So I was under a lot of pressure to take this amendment that opened it up to the timber and pulp industry and that's where the money went."

While FSA has since taken action to fix the problems identified by the OIG, Peterson said he doesn't believe the program will ever work as envisioned. He called the program worthless and said that at this point he doesn't support an extension.

Congress limited the amount of money available for BCAP in fiscal 2011 to $112 million and the House Appropriations Committee has voted to eliminate funding for the program in 2012.